Santander Bank Cleared After Customer Garcia Loses $751K to Crypto Scam He Personally Authorized

A Massachusetts appellate court shut the door on an unusual legal battle in which customer Lourenco Garcia sought to hold Santander Bank responsible for a $751,000 loss he

A Massachusetts appellate court has closed the book on an unusual legal battle that saw customer Lourenco Garcia attempt to hold Santander Bank liable for a $751,000 loss he personally incurred in a cryptocurrency scam.

According to the court’s ruling, neither Santander’s customer agreement nor Massachusetts law obliged the bank to block or investigate customer-authorized transactions, even when those transfers were linked to apparent fraud.

Santander cleared after customer loses $751K to crypto scam he personally authorized

In the period from December 2021 to January 2022, Garcia executed two debit card purchases and seven wire transfers from his checking and savings accounts at Santander to the Metropolitan Commercial Bank of New York. These funds were further used by Garcia to purchase cryptocurrency through Crypto.com and a purported trading platform known as CoinEgg.

However, Garcia later discovered that CoinEgg was a scam, and he ultimately lost $751,000 to the fraudsters. Consequently, he engaged in a lawsuit against Santander.

Garcia sued the bank for breach of contract, negligent misrepresentation, and violations of Massachusetts consumer protection law. His argument was that Santander should have recognized and stopped the high-risk transactions.

However, the appeals panel, composed of Judges Mary Cass Bowen, Giovanna F. Balungi, and Robert J. Rizopoulos, rejected all of Garcia’s claims. They highlighted that Santander’s customer agreement grants the bank the discretion to intervene when it suspects fraud but does not mandate such action.

The court also noted that Massachusetts regulators have not imposed any overarching requirement on banks to monitor or block all potentially suspicious transactions.

Garcia also brought up language on Santander’s website where the bank promises to “contact a customer” about any questionable activity. But the court found that such phrasing used in marketing materials would not create a binding legal duty on the bank.

Crucially, Garcia had personally authorized every single transfer to be made and had no interaction with any bank employees about the transactions. He only contacted the bank to raise concerns about the scam after the funds were already lost.

While this decision has limited precedential weight due to its focus on specific facts and legal issues arising in Massachusetts, it nonetheless carries a broader message about the boundaries of bank liability in the age of cryptocurrency fraud.

Despite the rapid rise of crypto scams—with rug pulls alone defrauding Web3 projects out of nearly $6 billion in Q1 2025, according to DappRadar—and increasing regulatory scrutiny, financial institutions are increasingly relying on the precise terms of their customer agreements to shield them from liability.

As this case showcases, individuals moving significant sums into speculative digital assets must be diligent in personally verifying the legitimacy of such ventures and take precautions to safeguard against fraud.

Garcia originally filed his complaint in October 2022 after two years of administrative claims and administrative hearings in connection with his complaint. After two more years of litigation—which saw a Superior Court judge rule in Santander’s favor in December 2023 before the appeals court reached the same conclusion—Garcia’s efforts to recover his lost fortune have come to an end.